Lucid’s Stock Tumbles After Company Slashes Production Outlook, Shows Disappointing Earnings

Mandatory Credit: Photo by Erik Pendzich/Shutterstock (12234446b)Lucid Motors all-electric vehicle, the Air, on display outside the Oculus at the World Trade Center in New York.
Erik Pendzich/Shutterstock / Erik Pendzich/Shutterstock

Electric vehicle company Lucid saw its stock tumble yesterday following its earnings release, which reported both losses and a slashed production outlook due to “extraordinary supply chain and logistics challenges.”

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“In the more immediate term, like many manufacturers, our production has been and indeed continues to be impacted by supply chain challenges. As you saw from our press release today, we have updated our 2022 production outlook for Lucid Air to a range of 12,000 to 14,000 vehicles,” CEO Peter Rawlinson said in an earnings call, according to a Seeking Alpha transcript. Initial expectations were at 20,000 vehicles in 2022, as GOBankingRates previously reported.

MarketWatch reported that Lucid stock fell more than 14% in after-hours trading following the earnings release.

On March 1st, the stock was down 12.8% in pre-market trading.

Lucid reported a net loss of $1 billion in the fourth quarter, according to the release, while revenue totaled $26.4 million versus the $59.9 million consensus, according to CFRA Research.

CFRA Research said it maintained a “hold” opinion on Lucid following the earnings release.

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“LCID cut 2022 production guidance for the Lucid Air to 12K-14K units, down from 20K units previously, citing supply chain constraints and a focus on quality,” Garrett Nelson, vice president at CFRA Research, wrote in a research  note sent to GOBankingRates.

Nelson added that the guidance was particularly disappointing given the fact the company was expected to produce at a quantity that was considered manageable in light of industry challenges.

“While there is a lot to like about the LCID story, such as the quality and specs of the Air, its balance sheet ($6.3B of cash at year-end) and its state-of-the-art new factory in Arizona, the massive cut to volume guidance is likely to weigh heavily on the shares and further the stock’s ongoing re-rating after high-flying performance in 2021,” Nelson wrote.

Sherry House, Lucid’s chief financial officer, said in the release that the company will expand its footprint in Europe and the Middle East in 2022 and plans to build a new manufacturing facility in the Kingdom of Saudi Arabia.

“We estimate that the location of our first international manufacturing plant in the Kingdom of Saudi Arabia may result in up to $3.4 billion of value to Lucid over 15 years,” House said in the release.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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